PSA profit dives 46% in 2008

PSA profit dives 46% in 2008    Global terminal operator PSA International said Friday its net profits for 2008 fell 46.2 percent from 2007 to $689 million, as the company unveiled is annual results in Singapore.
   That was despite growth in revenue, 5.8 percent to $2.9 billion, and container volume at its worldwide terminals, 7.3 percent to 63.2 million TEUs.
   “Strong growth up to July 2008 was rapidly eroded by the collapse in demand on major trade lanes in the last quarter of the year,” PSA said. “Net profit suffered a decline of 46 percent largely due to lower yields, higher operating costs, impairment provisions and lower divestment gains.”
   The company’s flagship terminal in Singapore handled 29 million TEUs in 2008, growth of 7 percent, and enough to keep it the busiest port in the world by volume for the fourth straight year. But PSA had been forecasting that Singapore would break through the 30 million-TEU barrier in 2008.
   PSA's terminals outside Singapore recorded throughput of 34.2 million TEUs in 2008, 7.7 percent higher than 2007.
   Group Chairman Fock Siew Wah said it was fortunate revenue was so good in the first half of the year.
   '2008 was shaping up to be another record breaking year for the PSA Group, with the first seven months bringing strong volume surge and record volumes handled,' he said in a statement. 'Unexpectedly, the group experienced a sharp and abrupt business decline in the latter part of 2008 as the global financial crisis rapidly deteriorated into a major global slump and recession. Against the bleak and gloomy backdrop prevailing since then, PSA was fortunate to have had a strong first seven months that provided cushion and enabled us to end up with reasonably credible financial results as a group. PSA is fully prepared to brace itself for a protracted and painful business down cycle.'
   Group Chief Executive Officer Eddie Teh blamed the 'Jekyll and Hyde personality' of 2008 for the downturn in profits.
   'Shored up by the robust first half of the year, PSA handled a total of 63.2 million TEUs of containers worldwide, a new high for the group,' he said. 'I see an extremely tough and increasingly challenging year in 2009, with more and more economies falling prey to the collapse of the financial systems, and global trade almost grinding to a halt. All eyes are on the rescue and stimulus efforts of governments around the world to prevent further shrinkage to their economies, and to mitigate the severity of the global recession, the success of which will determine the extent of the contraction of global trade flows, and its long term impact on our industry.'